If a fiduciary does not elect to recognize gain or loss on the distribution to a beneficiary of appreciated or depreciated property (determined as if the property had been sold at fair market value), the fiduciary's tax basis in the property carries over to the beneficiary.

Question

Quizplus · Accepted Answer

This is known as a non-recognition event under IRC section 1015(a). The beneficiary's tax basis in the property received is equal to the fiduciary's tax basis, adjusted for any additional consideration paid by the beneficiary to the fiduciary.

If a Fiduciary Does Not Elect to Recognize Gain or Loss